Client may want me to drop another client
Terry Ballinger
I haven't been approached officially, but a client has given me a "heads
up" that they may want to expand the scope of our relationship in a big
way. They may also want me to drop another client to avoid conflicts of
interest.
The background is, I do consulting for defense contractors. Since we
started our relationship, the number of contractors that could possibly
need my services has fallen by about 50 percent, due mostly to mergers
and outright purchasses by larger firms. Initially, everyone of my
clients agreed that there were no conflicts, based mostly on differing
levels of interest (that is, one client provides sub-systems, the other
integrates and builds vehicles). Now, both clients potentially could
compete directly, which puts me in the middle.
I'm gathering my thoughts so when the time comes to negotiate I'm not
caught unprepared. I haven't approached the second client yet, and I
won't until the offer is official.
My concerns, first and foremost, is to avoid even a slight risk of the
appearance of a conflict of interest. I can do that two ways, by
refusing the offer (and possibly harming the existing relationship with
the first client), or by accepting the offer (and negotiating a fee
that, not only replaces the lost client, but compensates me for the
injured relations with and loss of future business possibilities with
that client. I know if I drop them, they'll be forced to find others to
work with.)
My second concern is the additional business risk that comes with fewer
sources of income. Up until now, I've enjoyed a fairly wide base of
four to five clients. This may limit me to three, and reduce the time
that I have to serve additional clients.
OK. So, am I whining? Should I be happy that a client wants more of my
services? Or, am I justified in feeling uncomfortable?
I've found, and read in this group, that client relationships are
fragile and an important part of staying in business. I've built some
really strong ones, and I don't treasure the thought of injuring them.
I look forward to your comments. Thanks.
--
Terry Ballinger
President, DTech Consulting
"Death flees the bayonet of the brave." - Suverov
Perry West
Terry --
You outlined the decision factors very clearly. Ultimately, this will
come down to you making some hard choices. I think more detailed
information would be needed to offer any realistic advice. (I don't
consult in the defense arean, so wouldn't relate to many of the specifics.)
If you feel working for the two clients would present a conflict of
interest, then don't. Choose one or the other. If there is only an
appearance or suspicion of a conflict of interest, then you may be able
to negotiate an agreement where you agree while working in area X for
company A, you will not engage in working in area X for another company
without writting permission from company A. That way, even if companies
A and B are competitors, you can work for company A in area X and company
B in area Y. You want to make sure that area X does not cover your
primary skills. For example, a friend of mine consults with defense
companies on preparing proposals. He would be foolish to agree not to
work on proposal preparation for any other company, but he would be able
to avoid a conflict of interest by agreeing not to work on a proposal for
a specific project for any other company while retained by company A.
Hope this is of some help.
Regards,
Perry West
Mr. Richard C. Harris
Terry,
When asked in the past, my simple answer to the problem is that I will
sign any form of confidentiality agreement required by a client, but, I
will not sign a non compete. I am not an employee so to reduce the
population of those looking to use my services can seriously affect my
business. I have never had a client fail to contract with me on this
basis after it has been carefully explained to them that what they
really want to protect is the propriety of information.
Hope this helps.
Rich Harris
Harris & Associates
Mark Hartman
Terry:
IMO, dropping a client - just flat - is akin to burning a bridge.
Personally, I advise my clients to stay away from consultants who burn
bridges.
However, I have in the past had to end my relationship with some clients
due to similar situations; what I normally do (and I've been on the
receiving end of this as well) is to introduce an associate in to the
client to take over the account. Clients understand that sometimes a
project comes up which will require more time than you can give without
shedding some responsibilities; they won't - and SHOULDN'T - understand
if responsibilities are shed without making provision for coverage for
your present client.
==========================================================================
Mark Hartman Computer Solutions - specializing in all things Macintosh
C C++ 4th Dimension Networking System design/architecture
tel +1(714)758.0640 -+- fax +1(714)999.5030 -+- e-mail m...@pdasolutions.com
==========================================================================
"But it's not a fair test! People LIKE to use the Macintosh!"
Rob Frankel
Terry Ballinger wrote:
>
> My concerns, first and foremost, is to avoid even a slight risk of the
> appearance of a conflict of interest. I can do that two ways, by
> refusing the offer (and possibly harming the existing relationship with
> the first client), or by accepting the offer (and negotiating a fee
> that, not only replaces the lost client, but compensates me for the
> injured relations with and loss of future business possibilities with
> that client. I know if I drop them, they'll be forced to find others to
> work with.)
>
> My second concern is the additional business risk that comes with fewer
> sources of income. Up until now, I've enjoyed a fairly wide base of
> four to five clients. This may limit me to three, and reduce the time
> that I have to serve additional clients.
>
Terry:
If the client relationships are good on both sides, this is what I'd do:
Don't do anything until the decision is FORCED on you. At that time,
make both sides the same offer:
Go with the best long term deal you can get and offer to set up the
other client with the best people you know to rpelace you.
This is business. They know that. But smart business preserves
goodwill. And by providing them with an alternative, you will have
shown that their relationship is important to you, even as they no
longer are paying customers.
--
Rob Frankel
=================================================================
FRANKEL & ANDERSON
Advertising, Marketing & Killer Creative
Robfr...@aol.com • RobFr...@earthlink.net
Toll-Free in USA & Canada: 1-888-ROBFRANKEL
Telephone: 818-990-8623 FAX: 818-990-0428
http://www.frankel-anderson.com
=================================================================
Brooks Hilliard
NMK...@prodigy.com (Mr. Richard C. Harris) wrote:
> When asked in the past, my simple answer to the problem is that I will
> sign any form of confidentiality agreement required by a client, but, I
> will not sign a non compete.
I was once asked by a very popular radio station to agree not to take any
assignments from any other local station. We agreed on a three-year
limitation for (approximately) a 40% increase in my fees. They paid it.
I never had another radio station as a consulting prospect in the 10 years
since then.
I won that gamble.
I did several assignments for a large specialty construction company (who
were quite difficult to work with). Got a lead for an assignment with their
#1 (and very bitter) competitor. Had no non-compete agreement but felt
ethically bound to tell the second company about assignments with the first
and almost lost the job. I assured them that there would be no transfer of
knowledge in either direction and got the job. The second was a pleasure to
work with.
Moral: Be ethical and be willing to take a chance when it makes sense.
--
Brooks Hilliard, Principal, Business Automation Associates
Independent I.S. consulting and expert witness services
Phoenix, Arizona
E-mail: ba...@ix.netcom.com / URL: www.bizauto.com
Walter Boomsma
Terry Ballinger <ball...@ne.infi.net> wrote:
>I haven't been approached officially, but a client has given me a "heads
>up" that they may want to expand the scope of our relationship in a big
>way. They may also want me to drop another client to avoid conflicts of
>interest.
This is a tough issue to address, but you are right to be concerned.
I always get nervous when a client starts trying to tell me how to run
my business. My first reaction would be to focus on defining what they
perceive as a conflict of interest.
(I should also qualify my comments: I avoid assignments that involve
the government and, therefore, am not an expert on the process and the
politics.)
>The background is, I do consulting for defense contractors. Since we
>started our relationship, the number of contractors that could possibly
>need my services has fallen by about 50 percent, due mostly to mergers
>and outright purchasses by larger firms. Initially, everyone of my
>clients agreed that there were no conflicts, based mostly on differing
>levels of interest (that is, one client provides sub-systems, the other
>integrates and builds vehicles). Now, both clients potentially could
>compete directly, which puts me in the middle.
>I'm gathering my thoughts so when the time comes to negotiate I'm not
>caught unprepared. I haven't approached the second client yet, and I
>won't until the offer is official.
Why hasn't the second client raised this issue? If you could discover
how THEY view this "conflict of interest" it would be most
interesting, because it would then raise the question (again) of
what's truly going on in the first client's mind.
>My concerns, first and foremost, is to avoid even a slight risk of the
>appearance of a conflict of interest. I can do that two ways, by
>refusing the offer (and possibly harming the existing relationship with
>the first client), or by accepting the offer (and negotiating a fee
>that, not only replaces the lost client, but compensates me for the
>injured relations with and loss of future business possibilities with
>that client. I know if I drop them, they'll be forced to find others to
>work with.)
Is it really that black and white? Can the working relationships be
more clearly defined to avoid this potential conflict? If it comes
down to these alternatives, assist your second client in "finding
others." The first client should understand this, since they wouldn't
want you to just "drop" them, would they? You have a professional
obligation, etc. etc.
>My second concern is the additional business risk that comes with fewer
>sources of income. Up until now, I've enjoyed a fairly wide base of
>four to five clients. This may limit me to three, and reduce the time
>that I have to serve additional clients.
>OK. So, am I whining? Should I be happy that a client wants more of my
>services? Or, am I justified in feeling uncomfortable?
You're justified! You're second concern (fewer income sources) is
important, but it really goes beyond that. In a sense, you're being
bribed and accepting the bribe--even with a fight--sets a dangerous
precedent. Pushed to the extreme, you're on the road to becoming a
contract employee with only one contractor. As I read your scenario,
I'm haunted by the question, why hasn't this issue of conflict of
interest surfaced before this? My paranoid self feels like there's an
undercurrent or some factor yet undiscovered. I understand the merger
thing and direct competition, but it still would bother me.
On rare occasions when a client has raised some concerns about my
working with a competitor, I clarify my working relationship,
confidentiality practices, and contribution, usually with an almost
"Gawd, do you really think I'm that good!? (that I could give another
company that much of an edge)" This usually brings things into
perspective.
>I've found, and read in this group, that client relationships are
>fragile and an important part of staying in business. I've built some
>really strong ones, and I don't treasure the thought of injuring them.
>I look forward to your comments. Thanks.
>--
>Terry Ballinger
>President, DTech Consulting
>"Death flees the bayonet of the brave." - Suverov
Be brave! Keep your eyes and ears open, and keep asking "WHY?"
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